July 2010

Real Estate Hits the Summer Doldrums

Sales Slide Sharply from April Peak

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Both condo and single family home sales climbed steadily through April, but volume has been on a steady downturn, almost a plunge, ever since.  However, sales on a year-to-date basis are still up significantly compared to 2009.  Prices in both sectors remain at all time lows or at least the lowest numbers we’ve seen in quite a while, and they are relatively stable.  The real estate market is great, if you like rollercoasters.

As I said last month, short sales and REO’s are still the tail wagging the proverbial dog, and it appears they will be for some time. The short sale/REO combo accounted for 40% of home sales last month, but only 15% of listings.  Make sure to read the distressed property section of this month’s edition and log onto http://activerain.com/blogs/alohalee, to read my Trouble in Paradise column.  

Lucky we live Maui, aloha!

Maui condo sales prices likely hit bottom

But will looming inventory keep prices down?

According to the Realtor’s Association of Maui (RAM) the median condo price is down 28% this year compared to 2009. We can’t argue with the numbers, but anyone drawing a conclusion about the market based on the raw numbers would be off by a wide margin.

In January of 2009 the median condo selling price was an amazing $805,000.  However, by April the median had declined to a mere $410,000.  And, while the median has fluctuated up and down in the last 12 months, the July median of $390,000 is down about 5% on a rolling 12 month basis.

Oh, and the reason for that big price spike in January of ’09 was our old friend Honua Kai. The first phase, Hoku Lani, was closing at the time. This year Honua Kai closings in the new Konea tower also had an impact on our island wide sales median.  However, the Konea tower closings had a much smaller effect on the median than the closings in the Hoku Lani tower.  Why do you think that was?

 Last month in our mid-year report we said that prices are pretty much at the bottom.  The evidence continues to support that case.

If you are a buyer watching the market waiting for the bottom, it’s time to be shopping.  There are plenty of great deals, but don’t dawdle or you’ll wind up kicking yourself over the one that got away.

If you are a seller, yes, we think we are at the bottom.  However, there is a lot of competition including short sales and foreclosures, and properties are taking time to move.  So, if you want to sell your condo price it right, get a realtor with excellent marketing skills and get it done.

Highs and Lows

Last month’s low price for a condo on Maui was once again at Harbor Lights in Kahului. It was a 2 bedroom, 1.5 bathroom bank owned condo that sold for $34,000.  Rounding the bottom 10 were 3 Southpointes in Kihei, some Kihei Villages and another Harbor Lights.

At the top end a 3 bedroom, 3 bath ocean view unit at Honua Kai was listed and closed at $2,100,000. Three of the top 5 condo sales on Maui were at Honua Kai last month.

Area Highlights

Kihei remains condo central on Maui. It accounted for 31 of Maui’s 69 condo sales last month and posted a nice increase in selling price from $260K in June to $290K in July. 

There were 25 sales on the west side including 13 in the Napili/Honokowai area.

In Wailea the median selling price for the normally pricey properties fell to $737,995.  However, there were only 5 sales in Wailea, including 2 sales in the $400K range at Grand Champions.  

Potts’ Picks

There is a nice complex across the street from the ocean between Lahaina and Kapalua called Kahana Villa.  A new bank owned listing there, 2 bedroom, 2 bath is listed for only $269,900.  You can see details and pictures on the MLS at AlohaRealtyGroup.com. 344692.

If you want something a little closer to the ocean, take a look at this oceanfront Puamana unit.  Completely renovated with gorgeous views, and you can’t get any closer to the water than this.  It’s priced at $1,995,000.  I want it.  It is 344062 in the MLS.  

For more information on these or any other units send an email with your request to info@aloharealtygroup.com or, visit our website at www.aloharealtygroup.com.

Maui’s homes sales slide with the tide

The up and down market is making some seasick

Single family home sales climbed steadily from 48 in January to 90 in April, then declined steadily ever since.  July, with 61 sales, is at about the same level we were at last year.

With sales tailing off on the mainland as well last month, we may be seeing a new phenomenon.  The oft quoted rule of thumb that Maui’s market follows California by about 6 months seems to no longer be true.  For better or worse, we seem to be tracking very closely with Cali, specifically Orange County.

The median price is down by 9% for the year.  However, it has held steady at $500K for the last two months, so we may be seeing some leveling off.  

Area Highlights

Wailuku/Kahului still account for the most home sales. Selling prices in the central area are well below the island median.

Upcountry, principally Kula, Makawao and Pukalani continue to show strong sales. Sales in Kula and Makawao are up 27% and 32% on the year respectively.  Last month the median price upcountry was below the Maui median in all three neighborhoods, which could be fueling the sales.

On Maui’s west side there were 10 sales, including 3 in Kaanapali.  The most interesting thing about those 3 sales is that one was a bank owned house, one was a short sale and the one that was otherwise distressed went for 30% below asking price.

Kihei and Wailea, Maui’s south side, had fewer than 10 sales for the month.  

Highs & Lows

The lowest priced house selling in Maui in July was an REO (bank owned) house in Kahului. It was a 3 bedroom, 1 bath house of 680 square feet. It looks like it’s going to take some fixing.  It sold for asking price of $241,900 in 29 days.

The priciest homes are usually near the beach in south or west Maui. But this month an upcountry home in Kula took the top price position at $5,000,000.  It was 3 bedrooms and 3.5 baths and only 2,885 square feet. However, it sits on 8.5 acres and boasts some amazing bi-coastal views.

Potts’ Picks

There is a new short sale in Kihei. It is relatively new and quite a nice house near the beach.  This is in the Kamalii Alayna subdivision.  It has 4 bedrooms and 2.5 baths and is currently listed at $399,000.  It is 344403 in the MLS.

I can’t resist this luxury pick for the month.  The listing says the home is 6,510 square feet with a total of 7,600 under roof. It is situated on 2 acres across the street from the ocean in Makena (Wailea).  If you have $17,300,000 lying around it’s worth a look; 344450 in the MLS.

For more information send an email with your request to info@alohapotts.com, or see all of the listings on Maui at www.aloharealtygroup.com.

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Distressed property backlog grows

Spreading some light on shadow inventory

The “distressed” market on Maui seems surprisingly stable, or maybe unchanging would be a better description. While we are beginning to see some slight changes in the list volume, we should be seeing more significant changes. 

Currently there are 207 short sales listings on Maui, 121 condos and 86 homes. According to Realty Trac there are 815 properties that are either in foreclosure and headed for auction or have received a notice of default.

That indicates that over 85% of the properties that are in trouble are not listed for sale.  Some people may be applying for loan mods, others may be in denial, but sooner or later something has to happen with those properties.

Further, Realty Trac says there are 592 Maui properties owned by banks.  There are only 102 listed for sale. That indicates that over 80% of the bank owned (REO) properties on Maui are not listed for sale.

If you were wondering about the definition of “shadow inventory” read that last paragraph again.

If you are thinking about picking up a bargain and you are deciding between short sale properties and REO’s here is something to consider.  The average time on market of short sale homes is 299 days.  The average time on market for REO homes is 102 days.

The difference in selling time for condos is even more dramatic.  The average time on market for a short sale is 302 days.  REO’s, 60 days.

There is much more that can be said, and the analysis reveals more troubling trends or great opportunities, depending on which side of the fence you are perched.

To keep track of short sale and foreclosure trends on Maui, you might want to log into Short Sales and Foreclosures on Maui – Trouble in Paradise.

To get an up-to-date list of short sales and foreclosures, log onto Aloha Realty Group’s distressed properties page.

If you are interested in learning more about distressed properties on Maui, send me an email info@alohapotts.com and I’ll send you a list and some details.

Be sure to visit us online at Aloha Realty Group.com

A hui ho!

Get more information and details

To get more information on property and trends, you can search all properties listed for sale at www.AlohaRealtyGroup.com.  If you can’t find what you’re looking for there, send us an email to lee@alohapotts.com, and we’ll do our best to get an answer for you.  As we get more requests for information, we’ll add new sections to the website, newsletter or both.

About The Aloha Potts Team

Aloha Potts is a team comprised of L. Lee Potts, MBA, REALTOR® R(S) and Barbara S. Potts, MBA, REALTOR® R(B) and former California CPA.  We are business people, and we treat our clients with the same care and service attitude that we would like to receive when we do business.  We are in business for pleasure and profit.  We expect that most of our clients will enjoy the property they own in Maui (pleasure), and it would be nice for everyone if your property performs well for you (profit).  Real estate can be highly speculative, and profits are never guaranteed.  So if you are buying property

in Maui, it’s a good idea to surround yourself with a professional team.

Lee Potts is the former President of an international software company and former Marketing VP of a publicly traded franchise organization.  Lee and Barbara are both licensed under Aloha Realty Group. 

Barbara Potts was a CPA with Ernst and Young before joining Apple Computer back when both Steve’s were there (Jobs and Woz).  She was also Director of Strategic Marketing for Grass Valley Group, a division of Tektronix, and a business broker in California.